Assume That a Tire Company Sells 4 Tires to an Automobile

question 51

Multiple Choice

Assume that a tire company sells 4 tires to an automobile company for $400, another company sells a compact disc player for $500, and the automobile company puts all of these items in or on a car that it sells for $20,000. In this case, the amount from these transactions that should be counted in GDP is:

• A) $20,000.
• B) $20,000 less the automobile company's profit on the car.
• C) $20,900.
• D) $20,900 less the profits of all three companies on the items that they sold.

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Definitions:

Demographic

Statistical data relating to the population and particular groups within it, such as age, gender, income, etc., often used for marketing analysis.

Experience Curve

A graphical representation that shows how increasing production experience reduces the cost per unit due to learning and efficiencies.

Virtuous Circles

A sequence of reciprocal events that enforce a positive outcome, often leading to a situation where each iteration improves the previous one.

Competitive Advantage

A condition or circumstance that puts a company in a favorable or superior business position compared to its competitors.